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Friday, March 23, 2007

Foreclosuretown ~ Article found in Crain's

Blog entry: March 23, 2007, 11:25 am Author: SCOTT SUTTELL

Cleveland has become the go-to city for national media outlets providing detailed coverage of the spreading economic fallout of mortgage foreclosures.
The Chicago Tribune took its crack at the subject with a long feature on Tuesday.
Today it’s The New York Times’ turn.

The nation’s paper of record visits town and notes that Shaker Heights and several other Cleveland suburbs “are spending millions of dollars to maintain vacant houses as they try to contain blight and real-estate panic.”

In Shaker Heights, “officials are installing alarms, fixing broken windows and mowing lawns at the vacant houses in hopes of preventing a snowball effect, in which surrounding property values suffer and worried neighbors move away,” according to The Times. “The officials are also working with financially troubled homeowners to renegotiate debts or, when eviction is unavoidable, to find apartments.”“It’s a tragedy and it’s just beginning,” Mayor Judith H. Rawson of Shaker Heights, a mostly affluent suburb, said of the evictions and vacancies, a problem fueled by a rapid increase in high-interest, subprime loans.

“All those shaky loans are out there, and the foreclosures are coming,” Ms. Rawson said. “Managing the damage to our communities will take years.” Euclid Mayor Bill Cervenik tells The Times that the city has installed alarm systems in some vacant houses to keep out thieves, drug users and squatters.“The city has hired three new building inspectors, bringing the total to nine, to deal with troubled properties and is getting a $1 million loan from the county to cover the costs of rehabilitation, demolition and lawn care at the foreclosed houses,” the paper notes. (When the properties are sold, such direct maintenance costs will be recovered through tax assessments.)

In a report for Shaker Heights, Mark Duda and William C. Apgar of Harvard University “found that expensive refinancing deals had been aggressively ‘push-marketed’ in the city’s less affluent west and south sides, bordering Cleveland. They said that ‘the rising number of foreclosures threatens to undermine the stability’ of those areas,” according to The Times. “The moral outrage,” Ms. Rawson told the paper, “is that subprime lenders have targeted our seniors and African-Americans, people who saved all their lives to get a step up.”


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